Why We Need the Arbitration Fairness Act Now!

Today, U.S. Sens. Al Franken (D-Minn.), Richard Blumenthal (D-Conn.) and U.S. Rep. Hank Johnson (D-Ga) are introducing the Arbitration Fairness Act, which will eliminate forced arbitration clauses in employment, consumer, and civil rights cases, and allow consumers and workers to choose arbitration after a dispute occurs. The text of the bill has not yet been released, but we look forward to seeing it soon.

The Arbitration Fairness Act, which was proposed in 2009 but did not become law, is being re-introduced in response to the Supreme Court’s decimation of consumer class actions in AT&T Mobility v. Concepcion. We couldn’t better sum up the effects of Concepcion than Senator Franken did on his website:

“The majority of the Court held that the Federal Arbitration Act barred state courts from protecting consumers from [forced] arbitration clauses. The effect of this decision essentially insulates companies from liability when they defraud a large number of customers of a relatively small amount of money.”

These are not empty words. The effect of the Concepcion decision is real, although it may be hard to visualize until something goes wrong for you and you are left to fight a billion-dollar corporation, on your own, over a contested $50 charge on a phone bill. Some arbitration clauses have exceptions allowing consumers to bring cases in small claims court on an individual basis–but rest assured that the company will send its lawyers to defeat your claims (and the filing fee alone might not justify your time). Go to arbitration, and you’ll appear before a paid dispute resolution professional who gets an awful lot of business from your adversary, and whose decisions are only minimally reviewable in court. Talk to the press, and the big company will have its lawyers threaten you with a defamation suit. Does that sound far fetched? It’s not–it happened in one of our cases, and the threat was meritless and calculated to silence our client.

The only way consumers can fight for their rights are by banding together, and the Supreme Court has effectively taken that right away. So, thank you Senators Franken, Blumenthal and Rep. Johnson for introducing this bill. It’s nice to see that someone has consumers’ interest in mind.

Concepcion is not the only recent Supreme Court decision that has come out on the side of corporate interests (see Citizens United, which allowed unlimited political donations by corporations). So, although members of Congress can introduce a law overruling Concepcion, other elected representatives may choose to allow their biggest contributors the free reign that they have recently been handed. We hope not. In America, consumer spending amounts to about 70% of our economy. In one slash of the pen, the Supreme Court disenfranchised this majority. Maybe we should take a cue from the satire newspaper the Onion, which last October ran a story titled “American People Hire High-Powered Lobbyist to Push Interests in Congress.”